Intelligent Wave Inc.TSE: 4847

Financial Results for 1H (Interim Period) FY06/25, presentation

Feb 7, 2025 at 6:04 AM UTC · Issued by Intelligent Wave Inc.

Financial Results for 1H (Interim Period) FY06/25

(July 1 to December 31, 2024)

[Non-Consolidated]

Intelligent Wave Inc.

Announced on February 7, 2025

Financial2024年6月期Results１Q 業績とfor成果1H FY06/25

Forecast for FY06/25

Progress of the Medium-Term Management Plan

Reference

Overview

Sales and profits increased due to steady growth in the mainstay payment domain.
Sales and profits are almost in line with the plan.
Orders on hand increased significantly due to a large project for infrastructure operation services and multi-year

contracts for cloud services.

		1H FY06/24		1H FY06/25		Change

			Sales			Sales
		Results		Results		(YoY)
		composition		composition
			ratio			ratio
Net sales		6,946	-		7,540	-		+594	+8.6%

Gross profit		2,200	31.7%		2,231	29.6%		+31	+1.4%

SG&A expenses		1,348	19.4％		1,374	18.2%		+26	+1.9%

Operating income		852	12.3％		857	11.4%		+5	+0.6%

Ordinary income		859	12.4％		887	11.8%		+27	+3.2%

Net income		584	8.4％		610	8.1%		+25	+4.4%


Amount of orders	9,772	-		12,751	-		+2,978	+30.5％

Orders on hand	13,800	-		21,795	-		+7,994	+57.9％

Million yen

1H FY06/24

Forecast	Change

（vs.Forecast）


7,500	+0.5％

-	-

(0.3％)

+0.9％

+0.1％

Sales by Business Domain

In the payment domain, sales in the FEP and fraud detection areas increased due to system upgrades by existing customers,
and the number of companies using cloud service rose. Sales in others areas decreased temporarily on a decline in the number of projects for existing customer.
In the security domain, sales increased due to product introductions to a major customer.
In the data communication and analysis infrastructure domain, sales increased mainly due to system development

for securities companies.

							Million yen

			1H FY06/24	1H FY06/25	Change(YoY)

	Net sales	6,946	7,540	+594	+8.6%

	Payment	5,784	6,166	+381	+6.6%

		FEP *	2,493	2,721	+227	+9.1%

		Fraud detection	750	1,179	+428	+57.1%

		Acquiring	1,463	1,466	+2	+0.2%

		Others	1,077	799	（277)	(25.8%)

	Security	757	923	+166	+22.0%

	Data communication and	403	449	+46	+11.4%
	Analysis infrastructure

	Reference) Cloud services	1,180	1,527	+347	+29.4%

＊Front-end processor (FEP) system: Hardware and software with network connectivity, card usage authentication, and other functions required for credit card payment processing
			Copyright © INTELLIGENT WAVE INC. All rights reserved.		4

Top Five Clients by Sales

For DNP, security-related sales increased due to the introduction of new security products.
Sales for both the second and third "System Integrator" declined due to a large project for a credit card company that was shifted to the system development phase.

						Million yen

		1H FY06/24	1H FY06/25	Change	Main projects
			(YoY)

1.	DNP	871	930		+58	・

2.	System Integrator	784	607		(176)	System development for credit card company

3.	System Integrator	317	454		+137	System development for credit card company

4．	Credit card company	504	426		(77)

5． Credit card company	330	402		+72
					5
		Copyright © INTELLIGENT WAVE INC. All rights reserved.

Sales by Category

■System development sales decreased due to the shift of development phases for a large project, but increased due to

system upgrades for existing customers.

■Cloud services sales increased due to an increase in the number of users and addition of functions for existing users.

Security rose, mainly due to product introductions to a major customer.

				Million yen

	1H FY06/24	1H FY06/25	Change(YoY)

Net sales	6,946	7,540	+594	+8.6％

System development	3,457	3,479	+21	+0.6％

Maintenance	798	796	(1)	(0.2％)

In-house products and services	173	165	(8)	(4.8％)

Third-party products and services	578	647	+68	+11.9％
(hardware, etc.)


Cloud services	1,180	1,527	+347	+29.4％

Security	757	923	+166	+22.0％

Operating income

Gross margins in system development and maintenance in the payment domain remained steady, but gross profit margins declined as gross maegins in cloud services declined. We will continue to improve gross margins by enhancing productivity in system development and maintenance and adjusting prices to better reflect the value provided.
Selling, general and administrative (SG&A) expenses increased due to higher labor costs, but the SG&A-to-sales ratio declined.

1,000■ … Operating income ●… Operating margin

900 852 857

25.0%

	SG＆A expense		Million yen
Gross profit		Operating income


Gross profit margin	SG&A expense ratio		Operating margin

803

800

700

600

1,600

20.0%

1,400

1,200

15.0%

31.1% 31.4% 32.2% 33.0%

21.2%	21.5%
17.9%	20.9%

13.3%

10.2%

10.7%

12.1%

30.2%	32.9%	33.6%	32.6%	27.6%	31.3%

21.9%	17.3%	16.7%	18.4%	19.1%	17.5%

15.5%	16.9%	14.2%	13.8%
8.3%			8.6%

500

400	11.8%	12.3%	11.4%


300

200

100

1H FY06/23

1H FY06/24

1H FY06/25

1,000

10.0%800

600

5.0% 400

200

0.0%

1,134

						1,149			1,244	1,278		1,229			1,252
			1,000
	985			728		955							979
		667
	665				691	656	644	694	675	699
651
					588	634
483												534
		332
													553
	319		420								304
					263


Q1	Q2	Q3	Q4		Q1	Q2		Q3	Q4		Q1		Q2	Q3	Q4



		FY06/23
								FY06/24
															FY06/25

Cloud Service Business

Sales increased due to an increase in the number of users and addition of functions for existing users.
Infrastructure costs have increased due to delays in the infrastructure migration for cloud services. We will work

on improving operational efficiency and adjusting service prices to better reflect the value provided, and will continue to improve gross margins.

																			Million yen
											FY06/24						FY06/25


								1Q	2Q		3Q	4Q		1Q		2Q	3Q	4Q


				Amount of orders			614	969	890		2,761	1,618		1,932
				Net sales			592	587	618		705	718		809
				Orders on hand		6,717	7,098	7,371		9,426	10,326		11,449

				Gross profit			96		84	94		75	(20)		128


	■Number of customers									■Overview
40	IOASIS	IFINDS									Service						Overview
IGATES	IPRETS							1
					1				Demand grew from existing customers for additional functionality and
												■ IOASIS

			1						1	9	9			expansion in response to increased transaction volumes.
	1
	9

20	9					1	9						A growing number of companies are adopting "FARIS Shared Scoring

								6		11	12				Service Powered by PKSHA Security," which enables issuers to share AI-
			12					6
	9			1	3				■ IFINDS based fraud analysis data to prevent fraud. New services are being

						2	4								progressively rolled out as part of our next-generation fraud prevention
						3
	10	10		3	10	10	10	10				project "FARIS."
0		5	5

										■ IGATES		A large-scale project to develop a cross-industry multi-user platform for


		24年６月期 25年６月期	FY06/20	FY06/21	FY06/22	FY06/23	FY06/24	1H
											was released in January 2025.
	1H FY06/24	1H FY06/25							FY06/25
		2Q		2Q
												Copyright © INTELLIGENT WAVE INC. All rights reserved.				8

Amount of orders (by Category)

Received a large order for infrastructure operation services for a financial institution and will start providing such

services from January 2025.

System development decreased due to the shift of development phases for a large project.
Cloud services increased due to new projects and addition of functions for existing customers.

■ …System Development	Million yen
■ …Maintenance, In-house products and services, Third-party products and services
■ …Cloud Services	■ …Security

14,000
			12,751										7,156
12,000			2,619								6,355		704

										305
		9,772							5,515		5,594
10,000					5,421					1,932
					286
								631
		1,439

8,000		1,584	3,550					4,257	969	4,000	2,761	1,915

	6,459						807
				3,329	2,794			821
6,000	454			3,130
		132		2,904	610					2,835
2,613		322		1,781
	1,329	3,151	822		273	890	1,147	1,618
			507		839
4,000	1,847					297
		903	945	864	807			857		315


2,000	2,829	4,135	3429	1,398	1,430	1,477	1,527	2,001	2,134	1,430	2,142	1,745	1,683

0				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
	1H FY06/23	1H FY06/24	1H FY06/25

					FY06/23				FY06/24				FY06/25	9
					Copyright © INTELLIGENT WAVE INC. All rights reserved.

Orders on Hand (by Category)

■The order backlog for infrastructure operation services for financial institutions and multi-year contracts for cloud

services and security increased.

■System development decreased due to the shift of development phases for a large project.

■ …System Development	■ …Maintenance, In-house products and services, Third-party products and services	Million yen
■ …Cloud Services	■ …Security

25,000

21,795

20,000

3,289

15,000				13,800
				1,264		11,449

10,000	9,233		7,098
	606

	4,589
5,000				3,188		4,837

	2,297

					2,249			2,217
0		1,741


		１H FY06/22		１H FY06/23			１H FY06/24

													21,795
												18,636	3,289

											16,584	3,102

									13,995	1,594
							13,800
			11,548	10,974	12,073	1,264	1,639			11,449

			605	1,071
			582					9,426	10,326
9,047	9,233
				7,098
749	606				6,717	7,371
			6,913	6,695
4,214
4,589
							3,188			3,295	2,704	4,837
2,212	2,297	2,286		2,309	2,964
2,126

1,872	1,741	1,744	1,571	1,976	2,249	2,020	2,268	2,503	2,217
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q

														FY06/25
		FY06/23					FY06/24

Earlier from Intelligent Wave

All Intelligent Wave news releases